9 October 2018
The Economic Times
Lawyers figuring out various bidding options: VTB Capital
New Delhi: Russian investment bank VTB Capital is consulting with lawyers and has not made a final decision on whether it will bid alone for Essar Steel or through its existing Numetal consortium, the Moscow-headquartered financial services giant’s vice-chairman Makram Abboud told ET.
“We remain committed to acquiring Essar Steel. Our lawyers are figuring out various options,” Abboud said, addressing questions on media reports that said VTB Capital may bid solo for Essar Steel.
Speculation about a solo bid arose after the Supreme Court observed the “looming presence of Rewant Ruia” was found in Numetal all along even after VTB, through subsidiary Crinium Bay, upped its stake to 40% in the Numetal consortium by buying out Ruia. The court held that Rewant Ruia was a person deemed to be acting in concert with his father Ravi Ruia, who is the corporate debtor of Essar Steel, and would be rendered ineligible to submit a resolution plan (bid) under section 29A(C).
The only way Numetal can participate is by paying the overdues of all non-performing assets linked to the promoter, and not only Essar Steel. A solo effort by VTB would obviate such payouts.
Bankruptcy laws do not allow promoters of insolvent companies to bid for their assets either directly or through consortium-type structures, triggering Numetal’s disqualification.
The Russian investment bank has exposures in billions of dollars to India and is bullish on the Indian market, according to Abboud, who stated that VTB would look to scale up its investment activities here. “Our speciality is debt and equity. And very much in stressed and complex situations.
India is a priority market for us. It has been very difficult but also very rewarding. We want to increase our exposures here,” said Abboud.
Abboud said VTB was committed to navigating through the bankruptcy process. “It is a brand new process for a country as large as India. It was introduced very quickly.
But we are committed and we believe we will figure it out.” The investment bank has been fighting a court battle to remain eligible to acquire the bankrupt steel company, a prized asset which went into insolvency proceedings